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The Uberization of services

My initial experience with Uber

I first came across Uber when I was in San Francisco in August 2011. I had just arrived at my Airbnb host accomodation. I also realised that I had 10minutes to get to a meeting at Airbnb HQ and where I was staying was a lot further away than I expected.

I noticed a flyer for Uber stuck on the corkboard on the wall. It had a discount code, so it caught my interest. I figured I’d give it a shot and asked the host if I could have the flyer. However, my host offered me one of her spare bikes to ride to the office and said it would be faster than getting a cab ride. It was a girl’s bike and it was actually a lot of fun riding to work. I ended up riding this bike all over SF during my 2 weeks there.

My wheels in SF

I saved the Uber flyer for future use and kept it in my backpack. I was back at my host accommodation and had to meet up with some friends so I decided to give Uber a try again. I downloaded the app, put in my credit card details and made my first Uber request. I saw on the screen where I was with a person icon and it was glowing. Then I could see Uber’s around the city moving around.

Within 10 minutes, an Uber had arrived. It was an awesome looking car – a Lincoln Town car with a driver in a suit. It was clean, air conditioned, and you feel like a boss when you ride it in! Your own private driver on demand.

Uber Lincoln Town Car

Ubered again

After dinner one night with some colleagues, we decided to call it a night and head home. It also happened that a baseball game was on that night and had just finished. People were streaming out after the game, and there were thousands of people on the street. We called an Uber cab and it came in about 15 minutes. Was pretty amazing that on such a busy night, we could still get our own cab and it was reserved for us.

I ended up using Uber a lot during my brief stay in SF. It cost more than a regular cab, but it always came on time and you could see how close they were getting to you and you would receive an SMS as it was around the corner. The cost would have been approximately 66% more than a cab. So I always made a quick calculation in my head whether it was worth it. But because I was only there for a short time, the convenience it afforded and being on demand was much greater value than the cost.

I remember being in the Airbnb office and hearing one of my colleagues discussing how they were going to get to a place and another said “Uber it”. The fact that they used it as a verb meant a big deal – it had become a part of their language and a part of their lives. Its like the first time I heard my uni lecturer say “Google it” or when “Facebook me” became the norm.

Request me, maybe

What I liked about Uber is that it made requesting a cab and paying for it an easy and frictionless service. A one button request.

Ashton Kutcher, a famous actor and investor in Uber made some really interesting comments in this Techcrunch Disrupt interview. Check out his comments at 3.17 – 5.04.

Essentially, Kutcher is interested in service based companies that are disrupting the traditional industry players by becoming a “one button simplified transaction”. It removes the need for doing research, making a phone call and organising a booking. You are simply one button away from ordering a handyman, food, or a cab. Startups like Uber are lubricating eCommerce by making it simple and easy to transact with these services.

I was initially hesitant to put my credit card information into Uber, as it was the first time I had done it for an app. I mostly buy apps from iTunes and its really easy to use. Since they already have your credit card details, you just download the app you want, and put in your iTunes password. Its a frictionless experience.

A platform for on-demand services

Once you use Uber, they have your credit card information and you know that they provide a superior transportation service. Its becoming a platform for on demand transport services with cars, jeeps, and motorbikes being added. But I believe that the vision for Uber is bigger than this. Uber could become a platform for ordering anything on demand – local services, food, people by providing a superior service where they take a cut of 10-20%. Its like how Amazon and Apple have your credit card details, and now you can buy a whole range of items there beyond just books or music.

These comments in Inc.com interview with Travis Kalanick and their lead investor Shervin Pishevar, hinted at it as well.

Is it much of a stretch that Uber, which is on its way to becoming a verb, could soon mean “ordering food delivery” or “hiring a cleaning service”? It’s already standing for “reserving private planes”: Garrett Camp, who co-founded Uber with Kalanick (though he doesn’t have an operational role), last year launched BlackJet, an air-travel business modeled on Uber’s technology.

“Uber is building a digital mesh–a grid that goes over the cities,” Pishevar says. “Once you have that grid running, in everyone’s pockets, there is a lot of potential for what you can build as a platform. Uber is in the empire-building phase.”

Once Uber has the credit card details, trust, customer experience and logistics nailed, people could theoretically order anything over there. I thought their experiment with ordering ice cream was really interesting. Not just as a marketing stunt but as an example of how the platform could be used for other services.

Verticals for on demand services

The other interesting trend is the emergence of on-demand service verticals. You can see it already happening with verticals emerging such as these US startups and their Australian equivalents in brackets afterwards.

Whether Uber becomes the platform for on-demand services is debateable. If these startups can offer superior value to the consumer and the service provider, they’ll emerge as victorious. Its definitely an interesting space to watch.

As our lives get more busy, on demand services are just going to become more in demand!

I’m out like ice cream delivery,
Matt Ho

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About Matthew Ho

This is the personal blog of Matthew Ho. I blog about mobile apps and product management.
I'm a mobile product manager at Atlassian. I previously started two tech businesses. I also co-founded Native Tongue, a language learning game company. I previously co-founded Tapmint, a consultancy that creates innovative mobile & web apps. Go Chicago Bulls!